If the turnover period for accounts receivable is 8.1 times per annum, what is the average number of days it takes to collect cash from accounts receivable?
A)81 days.
B)45 days.
C)295 days.
D)60 days.

Question

Quizplus · Accepted Answer

To calculate the average number of days it takes to collect cash from accounts receivable, we need to divide the number of days in a year (365 or 360) by the turnover period. 
Thus, average number of days = 365/8.1 = 45.06 days.
Therefore, the best choice is B: 45 days.

If the Turnover Period for Accounts Receivable Is 8